What sort of fan on on the engine?  Is it a rigid fan, or some sort of
fluid coupline (fan clutch) or is it electric?  Usually slow speed
overheating is related to the fan and fan clutch (if so equipped) since
its the fan's job to pull enough air through the radiator to cool the
engine at slow speeds.  At higher speeds, the vehicle's motion through
the air is usually sufficient to keep enough air flow through the
radiator to cool the engine.

tj proclaimed:

  If the engine is truly getting hot enough that it is knocking, this
  is not at all good and can get expensive.  I strongly would not
  recommend continuing to drive it in this condition as you can
  warp the thing...and it may be too late.

  The temperature guage itself has been known to be a problem on that
  thing, but if you get knocking and A/C shutoff, the engine has
  detected in multiple ways that it is too hot.

  The 4.0 I-6 doesn't normally have overheat problems even in desert
  temperatures.   The radiator and cooling system are sufficiently
  oversized they can usually cool the engine even with a marginal
  water pump.

  When you say you checked the fan, how did you check it?  That thing
  should begin howling like a banshee as soon as the temp guage gets
  much over 190 and the rpm goes up.  If you don't hear the fan making
  a rather loud whirring as the engine heats up, that fan is bad.

  Loose serpentine can cause overheating. Normal tightness is quite a
  bit higher than most fan belts--should be virtually zero deflection.

  Bad fan clutch can cause overheating.  And is the most common cause
  of low speed overheat.

  Replacing the water pump with the wrong rotation version can cause
  overheating--there are two types and a common mistake by non-jeep
  mechanics is to put in the backwards one.